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On Tuesday, BNP Paribas (OTC:BNPQY) Exane analyst Antoine Belge upgraded Burberry Group (OTC:BURBY) PLC (BRBY:LN) (OTC: BBRYF) stock rating from Neutral to Outperform and set a new price target of GBP 13.50. The change in rating follows a decline in Burberry (LON:BRBY) shares, which have fallen approximately 25% from the year-to-date peak reached on February 6, after a strong fourth quarter (3Q25) performance.
Belge noted that Burberry is currently trading at only 1.5 times 12-month enterprise value to sales (EV/Sales), excluding leases. This valuation represents a roughly 30% discount to its historical average and is significantly below the sector average, which is trading at 4.3 times EV/Sales, at a roughly 50% premium to its historical average. The analyst highlighted that with confirmed improvements in commerciality and estimates that are significantly higher than the consensus, Burberry’s upgrade to Outperform from Neutral is warranted.
Burberry’s recent share price drop presents a more attractive valuation for investors, according to Belge. The luxury fashion house is seen as undervalued compared to its historical trading levels and the broader sector. The analyst’s new price target of GBP 13.50 suggests a potential upside for the stock.
The upgrade comes despite the company’s shares experiencing a notable decrease since reaching a peak earlier in the year. The decline followed a period of strong performance in the fourth quarter of the fiscal year 2025, indicating a possible overreaction by the market to short-term factors.
Investors may take the upgrade by BNP Paribas Exane as a positive sign, as the firm indicates a belief in Burberry’s capacity to outperform the market moving forward. The new price target and upgraded rating reflect a confidence in the company’s financial health and growth prospects.
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